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European Styrene Market Forecast 2018-2023

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The European styrene market was equal to 5.397 million tons in 2013. The largest country market within the region was Germany, which in 2013 accounted for a share of 22% of the total in volume terms. Until 2023, the European market is forecast to reach around 5.4 million tons, thus growing at a CAGR of about 0.4% per annum in the period 2018-2023. This is a slight increase, compared to the decline at a CAGR of around 0.6% per year, registered in 2013-2017.

The European production of styrene is likely to drop to around 4.7 million tons in the medium term. However, flat dynamics of the overall installed production capacities in the region and their annual average utilization rates are expected. In addition, the market is forecast to remain relatively balanced in terms of supply and demand, also showing moderately mixed dynamics in the medium term.

The market has observed a significant volume growth in the past few years, despite cost pressures. This was mainly due to the interpolymer substitution that had already occurred in less technically demanding applications. Another emerging trend on the global styrene market is linked with developments in processes, products and applications for styrene polymers. Among the notable trends are customized nanostructured surfaces, weight reduction, improvements in application performance and safety, as well as the tailoring of commodity plastics to customers’ needs and their applications. Regionally, due to China’s investigations against the US much of China’s current styrene import demand is being met by suppliers in the Middle East. Meanwhile, there has been an improvement in US styrene margins, mainly caused by the process of consolidation, which resulted in fewer producers selling the material in the US. As for the European market, it is currently not a demand-driven, but rather a supply-driven one, while the lack of investment is leading to ageing plants.

Merger and acquisition activity has been robust in the chemical industry during the past few years. Although, the consolidation trend has been stable even in uncertain times, the number of global chemical merger and acquisition deals is decreasing. Particularly on the styrene market, there has been interest in corporate restructurings. For instance, in 2019, Saudi Arabia’s Sabic announced its intention to merge the subsidiary company Saudi Petrochemical Company (Sadaf) into the affiliate unit Arabian Petrochemical Company (Petrokemya). The transaction is projected to complete in the second half of 2019 and may impact the development of products such as ethanol, styrene, butene, benzene, vinyl chloride and polyvinyl chloride among others.

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